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Booming software sales fuel Siebel earnings

The front-office software leader's second-quarter earnings more than double, surpassing analyst expectations, as revenues from software sales soar.

Front-office software leader Siebel Systems reported that second-quarter earnings more than doubled, surpassing analyst expectations, as revenues from software sales soared.

Net income on a pro forma basis for the period was $54.8 million, or 22 cents per share, compared with net income of $24.2 million, or 11 cents a share, for the same period the previous year. Pro forma results exclude charges related to the company's recent acquisition of auction software maker OpenSite, Siebel said in a statement made after yesterday's market close.

Analysts expected the San Mateo, Calif.-based company to earn 18 cents per share, according to a survey by First Call/Thomson Financial. Siebel makes customer relationship management (CRM) software that automates a company's marketing, sales and customer service needs.

The company also named former Excite@Home chief financial officer Ken Goldman as its own CFO, according to Bloomberg News. Goldman replaces Howard Graham, who is retiring from Siebel.

Revenues for the quarter jumped 119 percent to $387.4 million from last year's $176.7 million. Sales from software license fees were about $242.4 million, while revenues from maintenance, consulting and other services came in at $145 million.

The company continues to dominate the market for CRM software, facing increased competition from aggressive players Oracle, SAP and PeopleSoft.

Oracle has been working overtime to nab new business in the sector, posting strong CRM software sales growth in recent quarters. Last quarter, the database software giant said applications sales were fueled by a 161 percent growth in CRM software sales alone. Oracle also recently released its Internet business management software, Oracle 11i, which includes the latest version of its CRM software suite.

Oracle chief executive Larry Ellison has said that his company is second in the CRM market and has vowed to knock Siebel out of its No. 1 spot.

In its latest quarter, Siebel highlighted some new customer wins, including manufacturing equipment giant Caterpillar and SBC Communications.

The company also said that beefing up its existing deals with partners IBM Global, PricewaterhouseCoopers and Compaq Computer in the quarter helped boost its positive quarterly results.

Siebel expanded its agreement with Compaq to include plans for joint development and marketing campaigns. In addition, Siebel and Compaq will work together to sell and ship Siebel's suite of front-office applications on a full range of Compaq products, including PocketPC devices, laptops, desktops and server systems.